msn20221231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-07731

EMERSON RADIO CORP.

(Exact name of registrant as specified in its charter)

Delaware	22-3285224
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

959 Route 46 East, Suite 210, Parsippany, NJ	07054
(Address of principal executive offices)	(Zip code)

(973) 428-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	MSN	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of common stock as of February 14, 2023: 21,042,652.

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	18
Item 4. Controls and Procedures	18
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults Upon Senior Securities	19
Item 4. Mine Safety Disclosure	19
Item 5. Other Information	19
Item 6. Exhibits	19
SIGNATURES	20

	*Three Months Ended December 31,*						*Nine Months Ended December 31,*
	*2022*			*2021*			*2022*			*2021*

Net revenues:
Net product sales	$	1,704		$	2,509		$	4,335		$	6,290
Licensing revenue		228			65			971			195
Net revenues		1,932			2,574			5,306			6,485
Costs and expenses:
Cost of sales		1,361			1,826			3,549			4,786
Selling, general and administrative expenses		1,051			1,469			3,686			4,207
		2,412			3,295			7,235			8,993
Operating loss		(480	)		(721	)		(1,929	)		(2,508	)
Other (loss) income:
Loss on settlement of litigation		—			(450	)		—			(450	)
Interest income, net		235			7			424			40
Income from governmental assistance programs		4			—			34			207
Loss before income taxes		(241	)		(1,164	)		(1,471	)		(2,711	)
Provision for income tax expense		—			—			—			—
Net loss		(241	)		(1,164	)		(1,471	)		(2,711	)
Basic loss per share	$	(0.01	)	$	(0.06	)	$	(0.07	)	$	(0.13	)
Diluted loss per share	$	(0.01	)	$	(0.06	)	$	(0.07	)	$	(0.13	)
Weighted average shares outstanding
Basic		21,043			21,043			21,043			21,043
Diluted		21,043			21,043			21,043			21,043

	*December 31, 2022*			*March 31, 2022*

ASSETS
Current Assets:
Cash and cash equivalents	$	27,294		$	25,576
Accounts receivable, net		927			1,294
Licensing receivable		191			—
Inventory		2,345			2,112
Prepaid purchases		644			141
Prepaid expenses and other current assets		254			390
Total Current Assets		31,655			29,513
Non-Current Assets:
Property and equipment, net		2			2
Right-of-use asset-operating leases		244			403
Right-of-use asset-finance leases		2			2
Other assets		90			90
Total Non-Current Assets		338			497
Total Assets	$	31,993		$	30,010
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		514			758
Due to affiliate		1			—
Short-term operating lease liability		145			211
Short-term finance lease liability		1			1
Income tax payable, current portion		401			195
Advanced deposits		4,100			—
Deferred revenue		182			210
Total Current Liabilities		5,344			1,375
Non-Current Liabilities:
Long-term operating lease liability		98			201
Long-term finance lease liability		1			2
Income tax payable		1,202			1,613
Total Non-Current Liabilities		1,301			1,816
Total Liabilities	$	6,645		$	3,191
Shareholders’ Equity:
Series A Preferred shares — 10,000,000 shares authorized; 3,677 shares issued and outstanding; liquidation preference of $3,677,000		3,310			3,310
Common shares — $0.01 par value, 75,000,000 shares authorized; 52,965,797 shares issued at December 31, 2022 and March 31, 2022, respectively; 21,042,652 shares outstanding at December 31, 2022 and March 31, 2022, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(25,082	)		(23,611	)
Treasury stock, at cost (31,923,145 shares at December 31, 2022 and March 31, 2022, respectively)		(33,201	)		(33,201	)
Total Shareholders’ Equity		25,348			26,819
Total Liabilities and Shareholders’ Equity	$	31,993		$	30,010

			*Common Stock*				*Additional*								*Total*
	*Preferred*		*Number*		*Par*		*Paid-In*		*Accumulated*			*Treasury*			*Shareholders’*
	*Stock*		*of Shares*		*Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance — March 31, 2022	$	3,310		52,965,797	$	529	$	79,792	$	(23,611	)	$	(33,201	)	$	26,819
Net loss		—		—		—		—		(1,471	)		—			(1,471	)
Balance — December 31, 2022	$	3,310		52,965,797	$	529	$	79,792	$	(25,082	)	$	(33,201	)	$	25,348

		*December 31, 2022*				*March 31, 2022*
Finished goods		$	2,345			$	2,112

Weighted average remaining lease term (in months)	*As of December 31, 2022*			*As of December 31, 2021*
Operating leases		18.8			27.3
Finance leases		17.2			29.2

Weighted average discount rate
Operating leases		7.50	%		7.50	%
Finance leases		7.50	%		7.50	%

(in thousands)	Operating Leases			Finance Leases

2023	$	46		$	1
2024		149			1
2025		62			—
2026		—			—
Thereafter		—			—
Total lease payments	$	257		$	2
Less: Imputed interest		(14	)		—
Total	$	243		$	2

	Three Months Ended December 31,						Nine Months Ended December 31,
	2022			2021			2022			2021
Net product sales	$	1,704		$	2,509		$	4,335		$	6,290
Licensing revenue		228			65			971			195
Net revenues		1,932			2,574			5,306			6,485
Cost of sales		1,361			1,826			3,549			4,786
Selling, general and administrative expenses		1,051			1,469			3,686			4,207
Operating loss		(480	)		(721	)		(1,929	)		(2,508	)
Loss on settlement of litigation		-			(450	)		-			(450	)
Interest income, net		235			7			424			40
Income from governmental assistance programs		4			-			34			207
Loss before income taxes		(241	)		(1,164	)		(1,471	)		(2,711	)
Provision for income taxes		—			—			—			—
Net loss	$	(241	)	$	(1,164	)	$	(1,471	)	$	(2,711	)


31.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2	Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

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	EMERSON RADIO CORP.
	(Registrant)

	/s/ Christopher W. Ho
Date: February 14, 2023	Christopher W. Ho
	Chief Executive Officer (Principal Executive Officer)

	/s/ Richard Li
Date: February 14, 2023	Richard Li
	Chief Financial Officer (Principal Financial and Accounting Officer)